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The Lifestyle Format Still Has Legs

The Lifestyle Format Still Has Legs

AS IT MATURES, THE LIFESTYLE CENTER SERVES NEW MARKETS AND USES

by Jeff Green
January 2007
Published Online

Once a retail format has proven its strength and increased dramatically in numbers, it seems only natural to ask, can we have too much of a good thing?

With respect to lifestyle centers, which have great industry appeal through their imaginative, quality placement in convenient locations of what we once thought of as typical regional mall tenants, the answer seems to be — not yet.

The overriding imperatives are consumer attraction and the need for publicly traded national retailers to continue to grow their store counts and market presence. Retailers are working overtime to find such sweet spots, including rolling out new brands and concepts. But it takes time to mature new brands, and the process can be hit and miss as retailers explore new niches, spin-off from existing concepts, translate web or catalog entities to bricks and mortar or play copy-cat.

That said, I don’t expect that the stores will run out before the sites do. Overall, modern retail has done a superb job of bringing us fun, inventive merchandise and dining concepts, not to mention boatloads of commodities. Shopping still has its attractions. If anything, in the last decade, retail and new retail environments have gained economic development clout as the kind of glue that can help hold a community together.

Thus, we can expect lifestyle center developers to be kept busy a while longer as national chains, especially the specialty boxes, continue their aggressive expansive programs. When is enough, enough? The retailers will dictate that, so let’s consider some implications for the future of lifestyle centers as the stores march on.

Clearly, as the slam-dunk, stand-alone lifestyle center sites diminish, mixed-use development is helping fuel lifestyle growth. There is much commercial wisdom in mating lifestyle center retail with office, residential and hotel. Lifestyle centers have the caliber and character of tenants and architectural and human space qualities that suit these ‘New Urban’ environments. We can go back and forth about primary and secondary customers, but it can’t help but start out with built-in customers in the form of spatially integrated office workers and residents of close by condominiums, apartments and lofts.

At the same time, mixed-use developments are appealing to communities, including the high growth ones with outstanding demographics. They are a means to jump-starting a community destination or gathering place and, when done well, have a valuable role in identity building. And, unlike some of the pie-in-the-sky streetscape programs of the past, the best communities are listening to the end-users, bringing about mixes of uses that are less likely to sit empty.

A new opening for service-oriented tenants

In the quest for locations for retailers, the lifestyle center must continue to find holes of potential. This means becoming more of a community hub that can combine destination, convenience and service. We are already seeing smaller lifestyle centers, often no more than 80,000 square feet, which are comparable in size to most strip centers. As developers identify these niche locations and demographics, there is an opportunity to re-introduce, in up-scaled fashion, the service component of retail that is often missing in the modern environment. Examples include hair salons, smaller spas and skin care centers, designer eyeglasses centers, ethnic and specialty grocers, or artisan bakeries.

Building to the market

The lesson or direction is not to overstore America by building another generic or prototype lifestyle center wherever one can be shoehorned in, as we may have done in the heyday of regional malls and their department store anchors. Prototype centers may have been OK for the first incantation of lifestyle centers. Not now.

Better demographic and site selection methodology

In building to markets, as opposed to dream sheets, all signs point to a comfortable and prosperous middle age for the lifestyle center format:

• The willingness of retailers and their development partners to tackle more challenging infill locations, including urban locations that call for customized physical platforms, modified signage or alternative parking solutions.

• The duality of intense planning scrutiny and welcome mats being laid out by many discriminating communities.

• Variability in total project size.

Jeff Green is the president of Jeff Green Partners. His company consults with clients nationally and internationally in all phases of shopping center feasibility, redevelopment and long-term viability.

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Jeff Green Partners was founded in May of 2004 in response to a growing demand for a new level of expert consulting services in the retail real estate marketplace. Led by President and CEO Jeff Green, Jeff Green Partners provides a full spectrum of analytical and interpretive services for property owners and developers.